Gov Richardson: policies to address mortgage meltdown.

[seasat]

I didn't have time to post this earlier this week. He released his plan in a speech in Iowa on December 3rd. Gov Richardson makes the point that he pushed through a bill in NM in 2003 that addressed some of these problems in his state. He states that he took a lot of criticism over the bill but it has helped NM weather the foreclosure crisis better than other states. Here's a link to his issues page on crisis if you are interested in the details.

Here's the summary from his press release:

As Governor, Bill Richardson:

• Prohibited lending made without regard to one's ability to pay back the loan.
  
• Prohibited the refinancing of a home loan when the loan provided no net tangible benefit to the borrower.
  
• Restricted the fees and points charged for a home loan.
  
• Limited late payment fees.
  

As President, Bill Richardson will:

• Reform the bankruptcy laws to give primary housing residences the same status as vacation homes so that mortgages on people's actual homes can be restructured during bankruptcy.
  o This alone will prevent some 600,000 hardworking Americans from losing their homes in the coming months and years.
  
• Prevent up to 1.75 million Americans from defaulting on their mortgages by enacting the FDIC's proposal for a temporary freeze of introductory rates on the most default-prone adjustable-rate loans.
  
• Insist on transparency in the mortgage industry and build a firewall between credit-rating agencies and the companies that they rate.
  
• Preserve our communities affected adversely by foreclosures. While fighting to prevent foreclosures, Richardson also will work with lenders who do have foreclosed properties to ensure that these properties are responsibly maintained and that our neighborhoods are protected.
  
• Guarantee transparency in the credit card industry and all of its activities.
  o Insist on 'plain English' instructions for all credit card contracts. Users of credit should not need a PhD to understand what they are signing.
  
• Prohibit retroactive higher interest rates on balances incurred before a rate increase went into effect.
  
• Place limits on the interest rates that can be charged for medical debt and prevent credit agencies from downgrading credit scores due to medical debt.
  o Over one-third of working-age Americans have had trouble paying medical bills or have incurred medical debt in the last year, and medical expenses play a role in nearly half of all personal bankruptcies.
  

[papau]

1. excellent ideas except the mortgage market funds available depends on securitization and FDIC

freeze on rates would destroy that market because you would have as even less reliable cash flow to sell.

[seasat]

5. From what I understand the FDIC proposal only applies to subprime mortgages

It would freeze for some period the ARMs that started at higher rates of 7% to 9% from resetting in 2008 at higher rates of up to 13%. I'm not an expert and you're much better on these finance issues. Do you think that would affect the market that badly?

[sandnsea]

2. That's very impressive

I don't understand the ban on refinancing, but otherwise that really shows vision and concern for the people on his part. I wish he were a better campaigner. He's actually right on more issues than the rest of the field.

[seasat]

6. I think that it applies towards predatory schemes.

Some unscrupulous lenders would convince a borrower that wasn't very knowledgeable about finance into refinancing with promises of a lower rate. They would then tack on excessive fees and points so that the borrower would actually be paying a higher effective rate. ACORN lists some of the types of schemes in this article.

[jillan]

3. excellent! k/r

[MH1]

4. It's nice to see a candidate who can point to actual relevant accomplishments.

:)

[Kucinich4America]

7. Governor Richardson is moving up on my list.

:kick: